65 BPI and FGU INSURANCE (PRESENTLY KNOWN AS BPI/MS AUTHOR: Kylie Dado

INSURANCE CORP) v. YOLANDA LAINGO Notes:

G.R. No. 205206, March 16, 2016
TOPIC: Notice
PONENTE: Carpio
CASE LAW/ DOCTRINE:
 An insurance company has the duty to communicate with the beneficiary upon receipt of notice of the death of the insured.
 Notice to the agent is notice to the principal; then such notice of death to BPI is considered as notice to FGU Insurance as well. FGU
Insurance cannot now justify the denial of a beneficiary's insurance claim for being filed out of time when notice of death had been
communicated to its agent within a few days after the death of the depositor-insured.
Emergency Recit: Rheozel opened a Platinum 2-in-1 Savings and Insurance account with BPI with Laingo as beneficiary. The insurance
policy was issued by FGU Insurance. Rheozel died. 2 years after the death of Rheozel sent letters to BPI and FGU, requesting them to process
her claim as beneficiary. FGU denied her claim for being filed out of time. SC ruled that Laingo is not bound by the 3 calendar month deadline
for filing a written notice of claim upon the death of the insured. An insurance company has the duty to communicate with the beneficiary
upon receipt of notice of the death of the insured. Since BPI is the agent of FGU Insurance, then such notice of death to BPI is considered as
notice to FGU Insurance as well. FGU Insurance cannot now justify the denial of a beneficiary's insurance claim for being filed out of time
when notice of death had been communicated to its agent within a few days after the death of the depositor-insured.
FACTS:
Rheozel Laingo, the son of Laingo, opened a "Platinum 2-in-1 Savings and Insurance" account with BPI. Laingo as his named beneficiary.
 Platinum 2-in-1 Savings and Insurance account is a savings account where depositors are automatically covered by an insurance
policy against disability or death issued by FGU Insurance.

On Sept. 25, 2000, Rheozel died due to a vehicular accident as evidenced by a Certificate of Death issued by the Office of the Civil Registrar.
Since Rheozel came from a reputable and affluent family, the Daily Mirror headlined the story in its newspaper.

Laingo instructed the family's personal secretary, Alice Torbanos (Alice) to go to BPI and inquire about the savings account of Rheozel.
Laingo wanted to use the money in the savings account for Rheozel's burial and funeral expenses.
 Due to Laingo's credit standing and relationship with BPI, BPI allowed Laingo to withdraw P995K from the account of Rheozel. A
certain Ms. Laura Cabico, BPI employee, went to Rheozel's wake to verify some information from Alice and brought with her a
number of documents for Laingo to sign for the withdrawal of the P995K.

More than 2 years later, Rheozel's sister, Rhealyn, found the Personal Accident Insurance Coverage Certificate. She went to Laingo to convey
the information.

Laingo sent two letters (Sept and Nov 2003) to BPI and FGU Insurance, requesting them to process her claim as beneficiary of Rheozel's
insurance policy.

FGU denied the claim stating that Laingo should have filed the claim within 3 calendar months from the death of Rheozel as required under
Par. 15 of the Personal Accident Certificate of Insurance.

Laingo filed a complaint or Specific Performance with Damages against BPI and FGU Insurance.

Trial Court: In favor of BPI and FGU - the prescriptive period of 90 days shall commence from the time of death of the insured and not from
the knowledge of the beneficiary. Since the insurance claim was filed more than 90 days from the death of the insured, the case must be
dismissed

CA: Reversed - Laingo could not be expected to do an obligation which she did not know existed. Thus, she could not be bound by the 90-day
stipulation. Moreover, Laingo was not a party to the insurance contract.

BPI and FGU’s ARGUMENT:

1. words or language used in the insurance contract is clear and plain or readily understandable by any reader which leaves no room
for construction
2. ignorance about the insurance policy does not exempt respondent from abiding by the deadline and petitioners cannot be faulted
for respondent's failure to comply.

LAINGO’s ARGUMENT: insurance contract is ambiguous since there is no provision indicating how the beneficiary is to be informed of the
three calendar month claim period. Since petitioners did not notify her of the insurance coverage of her son where she was named as
beneficiary in case of his death, then her lack of knowledge made it impossible for her to fulfill the condition

ISSUE: W/N Laingo, as named beneficiary who had no knowledge of the existence of the insurance contract, is bound by the three
calendar month deadline for filing a written notice of claim upon the death of the insured

HELD: NO
RATIO:
Upon Rheozel's death, which was properly communicated to BPI by his mother Laingo, BPI, in turn, should have fulfilled its duty, as agent of
FGU Insurance, of advising Laingo that there was an added benefit of insurance coverage in Rheozel's savings account. An insurance
company has the duty to communicate with the beneficiary upon receipt of notice of the death of the insured. This notification is how a good
father of a family should have acted within the scope of its business dealings with its clients. BPI is expected not only to provide utmost
customer satisfaction in terms of its own products and services but also to give assurance that its business concerns with its partner entities
are implemented accordingly.

There is a rationale in the contract of agency, which flows from the "doctrine of representation," that notice to the agent is notice to the
principal, Here, BPI had been informed of Rheozel's death by the latter's family. Since BPI is the agent of FGU Insurance, then such notice of
death to BPI is considered as notice to FGU Insurance as well. FGU Insurance cannot now justify the denial of a beneficiary's insurance claim
for being filed out of time when notice of death had been communicated to its agent within a few days after the death of the depositor-
insured. In short, there was timely notice of Rheozel's death given to FGU Insurance within 3 months from Rheozel's death as required by
the insurance company

The records show that BPI had ample opportunity to inform Laingo, whether verbally or in writing:
1. Rheozel's death was headlined in a daily major newspaper a day after his death
2. Not only was Laingo, through her representative, able to inquire about Rheozel's deposit account with BPI 2 days after his death
but she was also allowed by BPI to withdraw to help defray Rheozel's funeral and burial expenses
3. BPI’s employee visited Rheozel's wake and submitted documents for Laingo to sign in order to process the withdrawal request.

These circumstances show that despite being given many opportunities to communicate with Laingo regarding the existence of the
insurance contract, BPI neglected to carry out its duty. Thus, BPI and FGU Insurance shall bear the loss and must compensate Laingo.